February 04, 2011

DOJ Urges Appeals Court to Free Congo from Contempt Sanctions

The Justice Department today urged a federal appeals court in Washington to strike down the monetary contempt sanction a judge imposed against the Democratic Republic of Congo for its alleged misconduct in litigation here.

The department's Sharon Swingle, a Civil Division appellate lawyer, told a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit the imposition of the fine, for alleged violations of court orders, goes against international practice and jeopardizes the government’s foreign relations.

Swingle argued keeping the fine in place could expose the United States to similar treatment in litigation in foreign courts. Judge Merrick Garland, who heard the case with Judge Douglas Ginsburg and Senior Judge Laurence Silberman, questioned why such an order in another country is harmful to the United States.

The United States was not a party in the litigation in Washington’s federal trial court. There, an investment company, FG Hemisphere Associates LLC, represented by a Sidley Austin team, is seeking to enforce an arbitration award. FG Hemisphere’s lawyers sought information from Congo, through discovery, on the country’s worldwide assets.

When Congo did not divulge the asset information in a timely manner, Judge Richard Leon held the country in contempt. Leon imposed a sanction that began at $5,000 a week and has increased to $80,000 a week. The fine stands at more than two million dollars now. Justice lawyers, on behalf of the State Department, intervened in the dispute after it reached the D.C. Circuit.

Ginsburg in court today questioned the vagueness of the government’s argument, noting the “potential” and “possible” harm to the federal government. “That’s it,” the judge said. “Nothing special to this case.”

Sidley partner Eric Shumsky said today Leon was well within his authority to order monetary contempt sanctions. The judge, Shumsky said, gave Congo ample time to comply with orders compelling the country's lawyers to turn over information. He urged the appeals court not to remand the case for further proceedings.

A pro bono lawyer to Congo, Jeremy Martin of Dallas’ Simpson Martin LLP, said Congo has not intentionally flouted court orders in Washington. The country, Martin said, remains in political turmoil and is attempting to right itself through, among other means, debt restructuring programs.